In decades past, only big enterprises and manufacturing businesses engaged in outsourcing. Nowadays, outsourcing companies across the globe have opened their doors to small and midsize businesses too. And manufacturing isn’t the only aspect of business that can be outsourced. It’s now possible to outsource processes such as customer service and accounting.
In return, business process outsourcing (BPO) teams give high-quality service at a low cost that’s perfect for the budget of a small to midsize enterprise (SME). If you’re new to outsourcing and want to know where and how to start, here’s a quick guide to the top countries to outsource and how you can begin.
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What is business process outsourcing?
Business process outsourcing means hiring a third-party company to do regular tasks for your enterprise. These companies set up a team for you that may be based overseas. This team can manage your payroll, answer phones, respond to customer queries, and more, depending on what your business needs.
In addition to accounting help and customer service, BPO vendors offer a wide range of services, such as software development, human resources management and digital marketing. They also cater to sectors like real estate, hospitality and finance.
BPO is an excellent option for businesses ready to scale but not looking to hire more full-time, in-house employees.
Advantages and disadvantages of outsourcing
Outsourcing your processes yields a lot of benefits.
- Access to cost savings: According to Outsource Accelerator, outsourcing can save you up to 70 percent on costs, since these companies cover everything you need to build an outsourced team. This is compared to in-house employment, which requires you to shell out resources for your staffers and provide employee benefits.
- Access to a bigger talent pool: Outsourcing your services connects you to competitive talent from different countries. These workers have innovative ideas and approaches, which can help you improve your processes and services.
- Access to better equipment: BPO vendors use high-quality equipment and top-of-the-line technology for their operations. Contracting with them gives your business access to a variety of tools to provide the best service to your customers.
- Access to 24/7 service: Many offshore outsourcing companies offer 24/7 services for their clients. With this dedication, you can ensure your business continues operating even outside your typical working hours.
All that said, outsourcing also has potential drawbacks. However, you can generally work through these disadvantages with your BPO company to ensure smooth operations.
- Security risks: Your outsourced teams may be exposed to sensitive information, such as customer data. Screen monitoring is a popular solution to avoid suspicious activities that may affect your business. [Read related article: What Type of Employee Monitoring System Do You Need?]
- Communication issues: You may experience issues in communicating with your remote teams, especially when they’re overseas. Different time zones and connection problems can make coordinating tasks difficult.
- Language and cultural barriers: Your customers might experience difficulties in understanding your outsourced agents, particularly when it comes to accents. Similarly, these workers may be unfamiliar with your customers’ culture and expectations.
Top outsourcing countries to consider
Choosing an outsourcing country and partner is not a decision that you should take lightly. Consider the country’s familiarity with English (or your native language), time zone, financial incentives and skill sets. Whether the country is nearshore (i.e., neighboring or close to the U.S. and in a similar time zone) or offshore (i.e., in another region and a very different time zone) can impact the outsourcing relationship. [Learn how to deal with geodiversity.]
Here are some of the top countries to consider when looking for a BPO partner.
The Philippines (offshore)
Its Westernized culture and strong English proficiency are two of the reasons people choose outsourcing partners in the Philippines. The country boasts cheap labor costs, high-quality service and 24/7 support.
Entrepreneurs and established businesses can use the Philippine Economic Zone Authority (PEZA) for seamless exports. The Philippine government agency offers financial help, tax breaks and business operation assistance to encourage economic growth.
The Philippines rank as the third largest English-speaking country. BPO vendors in the Philippines specialize in customer service and front-end operations, mainly in the financial services and telecommunications sectors.
India (offshore)
India remains the leading country from which companies outsource tech support and IT-related services. Aside from allowing for 24/7 customer support, India is appealing due to its cheap fees, top-of-the-line equipment and the strong English proficiency of its agents.
India has the second-largest English-speaking population globally. The country also significantly focuses on STEM education, with over 2 million graduates every year.
Brazil (nearshore)
2017’s outsourcing law enables Brazil’s agents to work on primary services like office work and main business processes. The country is popular for IT and tech support services and has international clients in Latin and North America.
Big companies such as IBM and HP have outsourced their services in the country for years.
Mexico (nearshore)
Though it’s more commonly used to outsource manufacturing, Mexico is slowly rising as an outsourcing destination for HR and IT. Among the perks of partnering with a Mexican company are the county’s proximity to the U.S. and its bilingual agents who are well-equipped to handle customer concerns.
Typical call center outsourcing costs
One thing to consider when outsourcing a call center is the cost. This can vary depending on the vendor’s country and the services you need. The cheapest countries to outsource from are India and the Philippines.
BPO companies offer two types of call center services with different costs.
- Inbound: Your outsourced team receives incoming calls from your customers. Your BPO partner can offer you a shared or dedicated team, depending on the volume of calls you expect to receive. Inbound services usually start at $8 per hour and can be charged monthly or on a per-use basis.
- Outbound: For outbound services, outsourced agents make calls to potential and existing customers for sales offers and billing reminders. The expense usually ranges from $8 to $15 per hour in Asian countries and a minimum of $22 per hour in the West. BPO vendors may also charge commissions on top of the hourly rates once they hit a specific quota.
How to start outsourcing
If you want to start outsourcing, you need to carefully research different BPO partners and calculate your budget to ensure a successful engagement with an outsourcing company. Here are the things you should do to begin the process.
Plan your expenses.
When hiring a BPO company, you need to consider your expenses first. There are free budget templates and other financial tools that can be downloaded online to help you evaluate your business’s finances and what you can afford to spend on outsourcing.
As you receive price quotes from vendors, keep in mind that if the fee is unusually cheap, chances are the quality of service you get will be sacrificed. Also, consider the location of the company. If you want to save on costs and receive quality service, hire either nearshore or offshore services as opposed to onshore outsourcing within the U.S.
Search for different outsourcing companies.
A simple Google search can go a long way. Research companies with your preferred services and price points. Vendors have websites that allow you to browse their offerings and connect with them. However, if you see a deal you think is too good to be true, you can email the vendor to ask for a quote in writing for the services you want and to inquire about any fine print.
Some of the best professional employer organizations, which facilitate HR outsourcing, excel across borders. See our review of Papaya Global for one such example.
Check and compare service offerings.
Gather quotes from different companies. Compare their prices and offerings and determine which is the perfect fit for your business. Remember that when choosing a partner, you don’t just want to go with the lowest price. You want to find the best service for you and your customers alike, even if that means paying a little more.
Verify companies through reviews.
Don’t rely on a one-sided perspective when researching BPO vendors. Pull up some reviews through Google and sites like Trustpilot to see what people are saying about a company’s services and whether its clients are satisfied.
A few bad reviews about hidden charges should make you suspicious about a company’s offers. Similarly, complaints of poor work performance on sites like Indeed and Glassdoor should cast doubt about the quality of services offered.
Talk to an outsourcing expert.
Contact a consultant or an agency that can help you with outsourcing for the first time or find a reference if you already know someone who outsources. An expert can advise you on which companies get you the best bang for your buck, what the latest deals and offers are, and the quality of available services. Most agencies provide such advice for a low cost, but this can be worthwhile to ensure you get the best deal and quality for your business’s needs.
Begin implementation.
Once you’ve signed an agreement with your chosen company, it’s time to implement the outsourcing service into your business’s operations. That may entail providing training for agents, drafting policies regarding what’s outsourced and what’s handled in-house, and setting up procedures for evaluating how well the BPO vendor is completing the outsourced tasks.
Julie Thompson contributed to this article.
